Do I need it?

If you run a car you have to insure it - that's the law. The type of insurance you get varies according to the extent of protection it provides and how much it costs you.

Fully comprehensive is the most expensive and covers everything - damage to your car, personal injury costs and any third party's vehicle and property. On very old, cheap cars, annual comprehensive premiums can cost more than the car is worth. But it's a must if you are buying a car using a credit agreement or a loan because if the car is a write-off or stolen you still have to continue paying the finance.

Third party insurance is the minimum legal cover allowed and is comparatively cheap. It covers damage to the other person's car or compensation but if your own car is stolen, burnt out or damaged it is not covered. Third party can be beefed up using add-on insurance such as fire and theft.